Innovation or irrelevance—it's your choice

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The re/insurance industry is increasingly being told to innovate by senior executives who know what they’re talking about. But how serious is the situation, and what are the true downsides to maintaining the status quo, asks Intelligent Insurer.

A number of well-known and respected figures in the re/insurance industry have made outspoken comments of late about the lack of innovation in the insurance industry and the sector’s diminishing importance to businesses and the wider economy.

Pat Ryan, the founder of Aon and, more recently, of Ryan Specialty, said in an interview with this magazine that insurers must act quickly to reverse the declining levels of insurance being purchased by corporates. He said the small and medium-sized enterprise (SME) sector in particular has been ignored by the industry and yet this is a sector that could generate growth if the correct products were offered.

He said that the whole industry—insurers, reinsurers and brokers—must create and offer more innovative products to smaller businesses that will help them view insurance as a tool that adds value rather than as simply a cost. “The risk of not doing this, especially given the ongoing economic downturn, will be a shrinking market—something that will ultimately hurt reinsurers too,” Ryan said.

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